Prepaid expenses are classified as current assets if the services purchased are expected to expire within 12 months or the operating cycle, whichever is longer.

Name: Prepaid expenses are classified as current assets if the services purchased are expected to expire within 12 months or the operating cycle, whichever is longer.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Prepaid expenses are expected to be consumed or exhausted within the next 12 months or operating cycle whichever is longer. Hence, they are considered current assets.

Prepaid Expenses Are Classified as Current Assets If the Services